Targeting is Important
Digital advertising is shaped by the thesis that acquiring as much data on the user is the path to delivering the most relevant and highest converting advertisements.
Within a single advertising network, this has definitely proven to be correct. Assuming the ad styles and formats stay relatively the same on a single network, if you have enough data on the user you can pretty accurately estimate the value of an interaction from a given user. All of the big tech companies are in fantastic positions to leverage this within their networks.
But the Medium Matters
But I would argue that the medium in which the ad is served is way more important than targeting the ad to a user profile.
Let’s take Amazon, for example. When a user navigates to Amazon.com, there is a very high probability that the user is in the market to purchase something. Then when the user searches for a product, you can pretty confidently say that the user is a willing buyer for whatever product they searched for. That’s even more valuable.
By contrast, when you see an Google display ad on a website, Google is trying to convince you to purchase something (or do something else that the advertiser wants). Google does have a significant data advantage in profiling users.
The point is, Amazon doesn’t need to profile their users (even though they do) to serve high quality sponsored listing ads. These ads are significantly higher quality because they were able to capture the market of a specific user behavior.
Medium Matters More
Let’s suppose that we took two advertising networks that both do display ads, like LinkedIn and Google. Let’s also say I want to advertise legal services for startups.
While it’s functionally the same ad format, it’s obvious that it would be better to advertise on LinkedIn. Without picking out any specific features of the users you want to target to within the network, the context of serving an ad through LinkedIn is so much more valuable because one of the use cases of LinkedIn is connecting professionals.
So what?
The real game changer lies in understanding the contextual nuances of the advertising medium. The best advertisements should align with the users immediate intent and platform context.
Advertisers and these large ad networks networks should shift from exhaustive user profiling to strategically placing ads in contexts where they naturally resonate. Like most messages in life, success hinges on leveraging the environment in which it is delivered.